<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
/X/ Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Quarterly Period Ended March 31, 1997
/ / Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Transition Period from ------------- to ------------
Commission file number: 0-19503
BENTLEY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MEGACARDS, INC.
(Former name of registrant)
Missouri 43-1325291
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9719 Conway Road
St. Louis, Missouri 63124
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (314) 569-1659
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days: Yes /X/ No / /.
On August 12, 1997, the registrant had 562,624 outstanding shares of Common
Stock, $.18 par value.
Transitional Small Business Disclosure Format (Mark one): Yes / / No /X/.
<PAGE> 2
BENTLEY INTERNATIONAL, INC.
FORM 10-QSB
<TABLE>
INDEX
<CAPTION>
Page
----
<S> <C>
PART I -- CONSOLIDATED FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements 3
Consolidated Balance Sheets -- March 31, 1997 and
December 31, 1996 3
Consolidated Income Statements -- Three Months Ended
March 31, 1997 and 1996 4
Consolidated Statements of Cash Flows -- Three Months Ended
March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
ITEM 3. Litigation 13
PART II -- OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
</TABLE>
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<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
BENTLEY INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 299,486 $ 349,799
Accounts receivable (net of allowance for
returns and doubtful accounts of $288,562
and $300,120, respectively) 1,626,170 2,499,570
Note receivable 66,000 110,000
Inventories 1,372,059 1,407,144
Other current assets 69,704 130,168
----------- -----------
Total current assets 3,433,419 4,496,681
Equipment and leasehold improvements 203,197 196,392
Other assets 69,800 69,800
----------- -----------
TOTAL ASSETS $ 3,706,416 $ 4,762,873
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 2,169,361 $ 2,519,654
Notes payable 1,501,798 2,382,036
Current portion of long-term debt -- 30,232
----------- -----------
Total current liabilities 3,671,159 4,931,922
LONG-TERM DEBT -- 36,635
EXCESS ACQUIRED ASSETS OVER COST 542,051 623,358
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $0.01 par value; 1,000,000 shares
authorized; none issued or outstanding -- --
Common stock, $0.18 par value; 10,000,000 shares
authorized; issued and outstanding, 562,624 101,272 101,272
Additional paid-in capital 1,905,297 1,905,297
Accumulated deficit (2,513,363) (2,835,611)
----------- -----------
Total shareholders' equity (deficit) (506,794) (829,042)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,706,416 $ 4,762,873
=========== ===========
- ---------------
See notes to financial statements.
</TABLE>
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<PAGE> 4
<TABLE>
BENTLEY INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
<CAPTION>
Three Months Ended March 31,
--------------------------------
1997 1996
---------- ----------
<S> <C> <C>
Net sales $3,105,361 $5,471,781
Cost of sales 2,073,268 4,569,712
---------- ----------
Gross margin 1,032,093 902,069
Selling, general and administrative expenses 794,664 1,545,770
---------- ----------
Income (loss) from operations 237,429 (643,701)
Interest expense (53,516) (174,821)
Other income 138,333 3,005
Net income (loss) $ 322,246 $ (815,517)
========== ==========
Net income (loss) per common share $ 0.57 $ (1.45)
Weighted-average number of
common shares outstanding 562,624 562,624
- ---------------
See notes to financial statements.
</TABLE>
-4-
<PAGE> 5
<TABLE>
BENTLEY INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
Three Months Ended March 31,
------------------------------
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 322,246 $(815,517)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 14,206 124,403
Amortization of excess of acquired
assets over cost (81,307) (81,307)
Net changes in assets and liabilities:
Accounts receivable 873,400 509,767
Inventories 35,085 827,498
Other assets 60,465 (180,333)
Accounts payable and other liabilities (350,372) 151,073
--------- ---------
Net cash provided by (used in) operating activities 873,723 (535,584)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (21,010) (123,390)
Proceeds from notes receivable 44,000 --
--------- ---------
Net cash provided by (used in) investing activities 22,990 (123,390)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on lines of credit (807,202) (704,511)
Payments on long-term debt (66,867) --
Proceeds from (payments on) notes payable (72,957) 190,000
--------- ---------
Net cash used in financing activities (947,026) (514,511)
--------- ---------
NET DECREASE IN CASH (50,313) (102,317)
CASH, BEGINNING OF PERIOD 349,799 245,911
--------- ---------
CASH, END OF PERIOD $ 299,486 $ 143,594
========= =========
Supplemental Disclosure of cash flow information
Interest paid $ 50,418 $ 121,303
- ---------------
See notes to financial statements.
</TABLE>
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<PAGE> 6
BENTLEY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
1. GOING CONCERN BASIS
The financial statements of Bentley International, Inc. (the "Company"
formerly known as Megacards, Inc.) for the year ended December 31, 1996 were
prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business.
The Company's significant operating losses in 1996 along with the bankruptcy
of the Company's Janco Designs, Inc. ("Janco") subsidiary in 1997 indicate
that the Company may experience difficulty in generating sufficient cash to
meet its obligations as they become due. These factors, among others, may
indicate that the Company may be unable to continue as a going concern for a
reasonable period of time.
The Company has pursued a strategy of enhancing liquidity by reducing
and closely monitoring expenses, downsizing where feasible, and combining or
eliminating certain businesses to achieve economies of scale and capitalize on
shared administrative functions and distribution outlets. The operations of
the unprofitable subsidiaries and divisions have been terminated. Bentley's
sole operating subsidiary, Windsor Art, Inc. ("Windsor"), is currently
operating profitably and generating a positive cash flow.
The accompanying interim consolidated financial statements are
unaudited, but, in the opinion of management, reflect all adjustments
(consisting only of normal recurring accruals) necessary for a fair
presentation. Reference is hereby made to the consolidated financial
statements, including the notes thereto, contained in the Company's Annual
Report on Form 10-QSB for the year ended December 31, 1996. The results of
operations for the three month period ended March 31, 1997 are not necessarily
indicative of the results to be expected for the year ending December 31, 1997
2. BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of Bentley
and its wholly-owned subsidiaries, Windsor, Janco and Alnick Realty Company,
Inc. ("Alnick"). All significant intercompany transactions have been
eliminated from the consolidated financial statements.
3. OPERATIONS
NATURE OF OPERATIONS
Bentley designed, repackaged and marketed sports picture cards produced
by major sports picture card manufacturers and marketed sports picture card
accessories. Megacards, Inc. became Bentley in June 1996 as the Board of
Directors believed that the change of the corporate name would better reflect
the broadening of the scope of the Company's businesses. Windsor and Janco,
which prior to the Business Combination (as defined below) were affiliated
through
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<PAGE> 7
common ownership, manufactured and distributed decorative mirrors and framed
prints to furniture stores, mass merchants, hotels and designers throughout the
United States. During 1996, the Company discontinued its Janco product line and
its sports picture card business segment in order to reduce costs and to improve
its liquidity position (see Note 5).
BUSINESS COMBINATIONS
Pursuant to an agreement dated April 29, 1996, the Company acquired all
the outstanding shares of Alnick for $85,000. Alnick was an affiliated
company prior to the acquisition. The acquisition was accounted for as a
purchase.
Pursuant to an agreement dated July 17, 1995, Bentley acquired all of
the outstanding common stock of Windsor in exchange for 423,500 shares of
Bentley's common stock and acquired all of the outstanding common stock of
Janco for a nominal amount of cash (the "Business Combination").
The Business Combination was accounted for as a reverse acquisition
under the purchase method of accounting. Under this approach, the accounting
for the transaction differs from the legal form of the transaction as
described above. Therefore, Bentley is not assumed to be the acquiror in the
Business Combination, but rather Windsor and Janco are. The historical
financial statements have been restated for all periods prior to the Business
Combination to include the combined results of operations and financial
position of both Windsor and Janco due to the common ownership of Windsor and
Janco prior to the Business Combination. Adjustments have been made to
eliminate the impact of intercompany transactions. The components of
shareholders' equity were stated in terms of Windsor's and Janco's
shareholders' equity on a combined basis prior to the Business Combination
with an adjustment to reflect the effects of the Business Combination on the
equity components.
4. REVERSE STOCK SPLIT
On July 8, 1996, the Company's Board of Directors authorized a
one-for-six reverse stock split of the Company's common shares, and an
increase in the par value, from $0.03 to $0.18. All share and per share
amounts have been restated to reflect retroactively the reverse stock split.
5. SALE OF BUSINESS SEGMENT AND DISCONTINUED LINE OF BUSINESS
SALE OF BUSINESS SEGMENT
In August 1996, the Board of Directors of the Company adopted a plan to
restructure the sports picture cards business segment (Megacards). In
September 1996, certain assets and liabilities, consisting primarily of
inventory and equipment, were transferred to Legends, L.P. for a 30% limited
partnership interest and a note in the principal amount of $110,000, of which
$44,000 has been repaid. Such transfer was partly a sale and partly a
contribution to capital. There was no gain or loss on disposal, as net assets
were either sold or transferred to Legends at their net book value, which
approximated fair value. Legends, L.P. is in the sports picture card business
and since the Company has a 30% equity interest in the limited partnership,
the activity of the sports picture card business segment is part of the
continuing operations of the Company.
-7-
<PAGE> 8
DISCONTINUED LINE OF BUSINESS
On December 27, 1996, Janco discontinued its operations due to
historical losses and in an effort to reduce costs and improve overall
corporate liquidity. Janco's line of business was within the decorative
mirrors and framed pictures segment, and as such, the termination of
operations is not considered discontinued operations of a business segment.
Certain assets consisting of inventory and equipment were sold to a third
party prior to December 31, 1996.
In February 1997, an involuntary bankruptcy petition was filed against
Janco by unsecured creditors.
6. NOTES PAYABLE AND LONG-TERM DEBT
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
<S> <C> <C>
Notes payable and long-term debt consist of:
Borrowings under various lines of credit,
secured by inventories, accounts receivable,
equipment and personal guarantees of
officers/shareholders, due on demand,
bearing interest at prime plus 1.5%,
expiring at January 1997 $1,087,798 $1,068,036
Notes payable -- shareholders, secured by
collateral agreement subordinate to third
party debt, bearing interest at the prime
rate plus 2%, due July 1997 414,000 1,314,000
---------- ----------
$1,501,798 $2,450,903
========== ==========
</TABLE>
The Company's borrowings are collateralized by substantially all of the
Company's assets. Certain of the Company's shareholders have guaranteed a
portion of the Company's obligations. Windsor's assets have been pledged to
cross-collateralize Janco's debt to the principal shareholders of Bentley.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Pursuant to an agreement dated July 17, 1995, Bentley International,
Inc. ("Bentley" or the "Company") acquired all of the outstanding common stock
of Windsor Art, Inc. ("Windsor") in exchange for 423,500 shares of Bentley's
Common Stock and acquired all of the outstanding common stock of Janco
Designs, Inc. ("Janco") for a nominal amount of cash (the acquisition by
Bentley of all of the outstanding capital stock of Windsor and Janco is
referred to as the "Business Combination"). The consolidated financial
statements include the accounts of
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<PAGE> 9
Bentley, Windsor and Janco. All significant intercompany transactions have been
eliminated from the consolidated financial statements.
In 1996, the Company consolidated operations by closing the Iowa sales
offices and the Erie, Pennsylvania facility, and moved all manufacturing and
administrative functions of Megacards into the Janco facility located in St.
Louis, Missouri. Efforts to reduce inventory continued through Megacards'
focus on selling products that used existing raw materials. The effort to
convert non-productive assets into cash resulted in a substantial reduction in
Megacards' debts.
In 1996, the Company purchased all of the outstanding common stock of
Alnick Realty, Inc. ("Alnick"), the lessor of the Company's Erie facility.
Simultaneously with the acquisition of the Alnick common stock, the Company
terminated its lease of the Erie facility and sold the real estate owned by
Alnick to a third party.
During the summer of 1996 it became evident to Megacards' management
that overhead and inventories had been reduced to the greatest extent
practicable. For the business to survive, investment in new product
development, inventory and sales personnel would be necessary. Due to
Megacards' primary secured lender's desire to have the loan repaid and the
Company's commitment to the home furnishings industry, additional investment
in the sports picture card business did not seem consistent with long-term
Company goals. Therefore, management began to explore opportunities to divest
itself of Megacards. A business combination was negotiated with Quality
Baseball Cards, Inc., a New York corporation ("Quality"), in which a limited
partnership, Legends, was formed. Quality became the general partner, and
owned 70% of the partnership, while the Company became a limited partner,
owning 30% of the partnership. Substantially all of the assets of Megacards,
other than accounts receivable, and all of the assets of Quality were
contributed to Legends. The accounts receivable of Megacards were collected
and applied towards the repayment of the Megacards' secured debt. As of
December 31, 1996, secured debt related to Megacards' operations and assets
was $73,036. As of April 16, 1997, the secured debt has been repaid.
Janco experienced operating difficulties in 1996, commencing with its
relocation to a new facility in St. Louis, Missouri. Delays in obtaining
occupancy permits in connection with improvements made to the manufacturing
facility resulted in Janco's inability to produce and ship merchandise during
the first two months of 1996. Due to the cost of the relocation and lower
than expected sales during the first quarter of 1996, Janco experienced
reduced cash flow in the second quarter of 1996. Personnel turnover at Janco
exacerbated the financial problems. Anticipated sales were repeatedly
delayed, postponing a recovery. Lower than expected sales and profit margins
resulted in operating losses throughout the year. In the third quarter of
1996, Janco's management recognized that a restructuring was necessary to save
the business. Suppliers of Janco were contacted in an attempt to negotiate
accommodations of debts. Certain of Janco's creditors accepted the proposal,
but the response was not sufficient to allow the restructuring to proceed. In
December 1996, Janco's management decided that financial resources were not
available to continue the operation of Janco. Management commenced
negotiations with Janco's secured lenders and its landlord to develop a plan
of liquidation that would maximize disposition proceeds and minimize losses to
Janco's creditors. Janco's secured creditors and its landlord agreed to a
plan of orderly liquidation of Janco's assets and all of the
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<PAGE> 10
tangible assets of Janco were sold to unrelated parties. Janco's accounts
receivable were collected through the first quarter of 1997 and the net proceeds
applied to the repayment of Janco's secured debt. On January 24, 1997, three
unsecured creditors of Janco filed a petition for involuntary bankruptcy. On
February 18, 1997, Janco consented to the involuntary bankruptcy. Pursuant to
certain agreements entered into in connection with the financing of Janco by
principal shareholders of Bentley, Bentley and Windsor are liable for certain
unpaid secured debts of Janco. The bankruptcy trustee has informally indicated
that he may attempt to impose liability on Bentley for certain unsecured debts
of Janco.
Windsor continued to operate without substantial changes throughout the
first three months of 1997. During 1996, Windsor hired a new financial
officer and sales manager. It is believed that the new personnel will assist
in continuing to improve the operations of Windsor. During the fourth quarter
of 1996, Windsor negotiated new financing with Norwest Business Credit, Inc.
("Norwest"). Norwest provided Windsor with an asset based lending facility of
up to $2.0 million. Management believes that this facility should provide
Windsor with the financial resources needed to facilitate a reasonable growth
in sales. In December 1996, Windsor's management decided to concentrate its
design and marketing efforts on its wall decor products and to suspend
introduction of new table top accessories under the Dolbi Cashier name.
As a result of substantial losses reported for 1996 and the filing of
the bankruptcy petition against Janco in January 1997, the opinion of the
Company's auditors indicates that the Company may not be able to continue to
operate as a going concern for a reasonable period of time. In the event the
Company is not able to negotiate extensions of certain debts of Janco, for
which Bentley and Windsor are liable, the Company may not be able to continue
to operate as a going concern for a reasonable period of time. It is not
possible to ascertain whether Bentley or Windsor may be liable for any
obligations of Janco, other than Janco's secured debts, as a result of the
Janco bankruptcy filing. In the event that Bentley is unable to retire the
Janco secured debt through the use of internally generated funds, Bentley
intends to seek to raise through a private offering of debt and/or equity, or
a sale of certain Company assets, funds sufficient to retire the maturing
Janco secured debt and necessary for other corporate purposes.
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<PAGE> 11
RESULTS OF OPERATIONS
The following table presents the results of operation for the three
months ended March 31, 1997 and 1996, respectively, by the Company's business
segments, sports picture cards (Megacards) and decorative mirror/framed
pictures (Windsor/Janco):
<TABLE>
<CAPTION>
1997 1996
------------------------------------------- -----------------------------------------
WINDSOR/ GENERAL WINDSOR/ GENERAL
JANCO<F1> MEGACARDS CORPORATE TOTAL JANCO MEGACARDS CORPORATE TOTAL
--------- --------- --------- ------- -------- --------- --------- ------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 3,105 $ -- $ -- $ 3,105 $3,885 $1,587 $-- $5,472
Cost of sales (2,073) -- -- (2,073) 3,341 1,229 -- 4,569
------- ---- ---- ------- ------ ------ --- ------
Gross margin 1,032 -- -- 1,032 543 358 -- 903
Selling, general and
administrative expenses $ (757) $ -- $(37) $ (794) $1,042 $ 504 $-- $1,546
======= ==== ==== ======= ====== ====== === ======
Income (loss) from
operations $ 275 $ -- $(37) $ 238 $ (497) $ (145) $-- $ (644)
Interest expense 43 -- 11 54 83 92 -- 175
Other expense (income)--net (81) (54) (3) (138) -- (3) -- (3)
------- ---- ---- ------- ------ ------ --- ------
Net income (loss) $ 313 $ 54 $(45) $ 322 $ (581) $ (234) $-- $ (815)
======= ==== ==== ======= ====== ====== === ======
Net income (loss) per common
share $ 0.57 $(1.45)
<FN>
- ------------------
<F1> Janco's operations were terminated in December 1996.
</TABLE>
Windsor's and Janco's combined net sales decreased from $3.9 million for
the first quarter of 1996 to $3.1 million for the comparable period in 1997.
Windsor's sales increased during the first three months of 1997 versus 1996
due to improved marketing and availability of products. The combined sales of
Windsor/Janco, however, decreased as a result of the discontinuance of Janco's
operations.
The cost of sales for the combined Windsor/Janco operations decreased
from $3.3 million for the first three months of 1996 to $2.1 million for the
comparable period in 1997. The reduction in cost of sales is a result of the
discontinuance of the operations of Janco. The increase in Windsor's cost of
sales in the first quarter of 1997 over the same period in 1996 was
attributable to an increase in net sales. Gross margin for the combined
Windsor/Janco increased $489,000 to $1.0 million for the quarter ended March
31, 1997 from $543,000 for the same quarter in 1996. As a percentage of net
sales, the gross margin increased to 33% in the first quarter of 1997 from 14%
for the comparable period in 1997.
Selling, general and administrative expenses for Windsor and Janco
decreased from $1.0 million for the first quarter of 1996 to $757,282 for the
same period in 1997. The decrease was the result of the discontinuance of
Janco's operations. The increase in Windsor's selling, general and
administrative expenses was due primarily to increased sales.
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<PAGE> 12
Interest expense for Windsor and Janco decreased from $82,999 for the
first quarter of 1996 to $42,516 for the identical period in 1997. The
reduced interest expense was due to the repayment of a substantial part of
Janco's debts from the discontinuance of its operations, plus a reduction in
the outstanding balances on Windsor's line of credit.
As a result of the foregoing, Windsor and Janco reported net income of
$313,602 for the first quarter of 1997, compared to a net loss of $581,000 for
the same period of 1996.
Megacards reported no sales in the first quarter of 1997 as a result of
the business combination with Legends, L.P. A profit of $54,189 was recorded
during the first quarter of 1997 due to the collection of accounts previously
thought to be uncollectible. This compares to a net loss of $234,000 in the
first quarter of 1996.
LIQUIDITY AND CAPITAL RESOURCES
During the first three months of 1997, the Company's operating,
investing and financing activities used $50,313 of cash of the business. Cash
was generated through the sale of Janco's assets and used to repay Janco's
debts, reduce Windsor's debts and increase Windsor's inventories.
Capital expenditures of $21,000 were made by Windsor in the first three
months of 1997.
As of March 31, 1997, the primary secured debt of Megacards and Janco
was repaid in full from collection of the accounts receivable. The secured
debt of Windsor was refinanced with Norwest Business Credit in 1997. As of
March 31, 1997, Windsor had available borrowing capacity sufficient to operate
its business for a reasonable period of time.
Management is currently exploring courses of action to retire the Janco
debts for which Bentley and Windsor are liable. The Company is currently
engaged in negotiations to extend the maturity of the Janco debt. The Company
was released from any future liability on the Janco lease. The Company
anticipates that additional working capital of $400,000 to $700,000 will be
required during the remainder of 1997 to repay the Janco secured debt and
provide sufficient capital to fund its planned operations. The Company
presently intends to seek to attain such financing pursuant to the private
placement of debt or equity securities or the sale of certain assets of the
Company. The Company is not considering any acquisition opportunities at this
time. There can be no assurance that such financing or asset sales will be
available to the Company on favorable terms or at all.
As of March 31, 1997, the Company reported an allowance for doubtful
accounts of $288,562. Management of the Company believes such amount was
appropriate in light of the amount and anticipated collectibility of the
Company's accounts receivable at that time. In order to maximize the payment
of its receivables, the Company employs a person, full-time, whose
responsibility is to seek payment of past due accounts. If such efforts are
unsuccessful, the Company engages a commercial collection agency to pursue
persons with past due accounts.
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<PAGE> 13
ITEM 3. LITIGATION
On January 10, 1996, the Company filed suit in the U.S. District Court,
Eastern District of Missouri against Stephen G. Callendrella and Aztec Capital
Corporation, a Colorado corporation (collectively, the "Defendants"), seeking
an unspecified amount of damages for alleged violations of Section 13(d) of
the Securities Exchange Act of 1934, as amended, and acts of common law fraud
in connection with the Defendants' purchase of the Company's Common Stock.
Moreover, the Company sought declaratory judgment relief with respect to any
causes of action arising in connection with the Business Combination under
federal securities and state laws.
On February 12, 1996, the Defendants filed suit (the "Countersuit") in
the U.S. District Court, District of Colorado against one current and five
former directors of the Company alleging, among other things, breaches of
their fiduciary duties to the Company in connection with the Business
Combination. The Company was not named as a defendant in the Countersuit,
however, the Company had certain obligations to indemnify and hold harmless
the defendants named in the Countersuit. Pursuant to the Company's motion to
transfer, the Countersuit was transferred to the U.S. District Court, Eastern
District of Missouri and consolidated with the related litigation pending
there.
On July 14, 1997, the United States District Court, Eastern District of
Missouri dismissed the counterclaims brought by Defendants against the one
current and five former directors of the Company.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K, dated February 3, 1997 to report
pursuant to Item 5 thereof, the filing of an involuntary petition pursuant to
Chapter 7 of the United States Bankruptcy Code against Janco in the United
States District Court for the Eastern District of Missouri.
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<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BENTLEY INTERNATIONAL, INC.
(Registrant)
August 12, 1997 By: /s/ Lloyd R. Abrams
-------------------------------------
Lloyd R. Abrams, President
Chief Executive Officer and
Chief Financial Officer
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BENTLEY INTERNATIONAL, INC. QUARTERLY REPORT ON FORM
10-QSB FOR THE QUARTER ENDED MARCH 31, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 299,486
<SECURITIES> 0
<RECEIVABLES> 1,692,170
<ALLOWANCES> 288,562
<INVENTORY> 1,372,059
<CURRENT-ASSETS> 3,433,419
<PP&E> 203,197
<DEPRECIATION> 133,989
<TOTAL-ASSETS> 3,706,416
<CURRENT-LIABILITIES> 3,671,159
<BONDS> 0
<COMMON> 101,272
0
0
<OTHER-SE> (608,066)
<TOTAL-LIABILITY-AND-EQUITY> 3,706,416
<SALES> 3,105,361
<TOTAL-REVENUES> 3,243,694
<CGS> 2,073,268
<TOTAL-COSTS> 2,867,932
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,516
<INCOME-PRETAX> 322,246
<INCOME-TAX> 0
<INCOME-CONTINUING> 322,246
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 322,246
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
